Transfer of matrimonial property – who is responsible for ongoing liabilities before the transfer?
In divorce cases where one party is given the option to take over the other's share of the matrimonial property, who should bear the ongoing mortgage and property tax payments until the transfer is complete?
If my spouse is ordered to transfer the matrimonial property in our joint names to me, who is responsible for the ongoing liabilities when the transfer has not yet been effected?
In divorce proceedings, the situation where the Court gives one party the option to buy or take over the other party's share of the matrimonial property often arises. A practical question that arises from this is that pending completion of the transfer of the matrimonial property, who should bear the ongoing mortgage and property tax payments in the meantime?
The Court of Appeal answered this question in the case of TIC v TID  SGCA 75. The Court concluded that the party who would take over the other party’s share of the matrimonial property should be solely liable for all remaining mortgage and property tax payments between the date of the Court Order and the date of completion.
Facts of TIC v TID  SGCA 75
The parties in this matter were parties to divorce proceedings. In essence, the Family Justice Courts and subsequently, the High Court eventually ruled that the net equity in the matrimonial property would be in the ratio 58:42 in favour of the Wife. The Wife was also given the option to take over the Husband’s share of the property upon payment of a fixed amount. As the Wife had confirmed that she wished to take over the Husband’s share of the property, the High Court ordered that the Wife be solely liable for the ongoing liabilities. The Wife then appealed to the Court of Appeal.
The Court of Appeal’s decision
The Court of Appeal dismissed the Wife’s arguments that the ongoing liabilities for the matrimonial property should be shared with the Husband. The Court of Appeal affirmed the High Court’s decision that the Wife should bear the ongoing liabilities on her own.
However, the Court highlighted that it was necessary to distinguish between mortgage payments and property tax payments.
With regard to mortgage payments, the Court of Appeal held that the prima facie position was for the payments to be made by the eventual owner of the property. This was because the eventual owner would solely benefit from the payment of the outstanding mortgage. As such, the Court found that it would only be fair for the eventual owner to bear the mortgage payments during the interim period. However, the Court held that the appropriate circumstances could displace the prima facie position that the payments would be made by the eventual owner.
In addressing property tax payments, the Court of Appeal ruled that the prima facie position was that such payments should be borne by the party who should be taken to be the owner of the property, subject to the Court’s power to make a different order if necessary. The ownership of the property for this purpose should be reflected by the Order of Court for the division of the matrimonial property. In this regard, the property tax payments should be made by the legal owner of the property as at the date of the Order of Court. Similarly, the appropriate circumstances could displace this prima facie position.
The current law
Moving forward, the current position of the law after the Court of Appeal’s ruling in TIC v TID  is as follows:
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